Bad Year, Better Fourth Quarter for Eddie Bauer

Fourth-quarter direct sales at Eddie Bauer Holdings, the parent company of Redmond, WA-based apparel and home goods cataloger/retailer Eddie Bauer, inched up slightly, to $94.3 million up from $94.1 million for the same period last year. For the period ended Dec. 30, total revenue increased 1.4% to $381.9 million, up from $376.4 million. Retail and outlet store sales increased 1.5% to $270.9 million, compared to $266.6 million for the same period last year. Same-store sales climbed 4.6%. Net income soared to $63.2 million after a net loss of $12.8 million in the fourth quarter of fiscal 2005.

For fiscal 2006, direct sales slipped 4.3% to $256.5 million, down from $268.1 million in fiscal 2005. For the fiscal year ended Dec. 30, total revenue fell 4.3%, to $1.013 billion from $1.059 billion in fiscal 2005. Retail and outlet store sales dipped 4.5%, to $700.1 million from $733.2 million in fiscal 2005. Same-store sales decreased 2%. The company incurred a net loss of $212.0 million compared with a net income of $38.1 million in fiscal 2005.

The 2006 net loss includes a previously announced goodwill impairment charge of $117.6 million recorded in the 2006 third quarter and increased tax expense in the second and third quarters of 2006 of $23.5 million and $52.7 million, respectively, to increase the tax valuation allowance related to the company’s net operating losses, officials said in a release.

Eddie Bauer interim CEO Howard Gross said in a statement: “Results for the fourth quarter reflect a solid response from customers to our refocused merchandise assortment, which led to positive comparable stores sales and reduced markdowns. Our objective going forward is to build on this momentum by continuing to refine our merchandising strategies while remaining clearly focused on the needs and preferences of our core customers. We are encouraged that fiscal 2007 has gotten off to a strong start with comparable store sales for the quarter-to-date period through March 10th up 9.5% and sales in our direct channel up 12.9%.”

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